Ziock deal hinges on Rockford road, parking improvements

ROCKFORD — The city will have to spend millions to hold up its end of a deal to redevelop a century-old skyscraper into a hotel and conference center.

But city leaders say that won’t jeopardize any infrastructure improvements already approved in the city’s five-year capital plan, something aldermen questioned last week.

The city will be required to build new downtown parking and improve traffic flow around the former Ziock building, 416 S. Main St., as part of a proposed development agreement with Gorman & Co. to transform the former industrial manufacturing facility into a 150-room hotel complex.

“We’re being told that we can do this without compromising our (capital improvement) projects,” Ald. Tim Durkee said Monday. “A lot of us ... are raising our eyebrows thinking, ‘how is that possible?’”

Aldermen plan to hold a special meeting Friday to hash out their questions about the development agreement in anticipation of a vote Monday on whether to approve the deal.

City Administrator Jim Ryan said in a memo to aldermen that they can finance roughly $2 million worth of road improvements with reserves built up in the city’s motor fuel tax fund. That’s expected to cover the cost to convert South Main into a two-way road between Cedar and Chestnut streets and make the Chestnut Street bridge more pedestrian friendly.

The agreement also requires the city to construct a 500-space parking deck and a surface lot near the conference center by October 2016. Downtown parking has been at a premium since the city lost 400 parking spaces when it closed the concourse parking deck adjoined to the BMO Harris Bank Center in 2012 because of structural problems. The anticipated cost of downtown parking improvements is $16.6 million, about $8 million of which is attributed to the requirements of the redevelopment agreement. The city plans to pay for those improvements with a combination of parking fees, new market tax credits and money already set aside in the capital improvement plan.

The city’s capital costs are meant to spur Gorman’s $52.7 million redevelopment of the Ziock building, also known as the Amerock building. Ryan said the hotel development is the catalyst for the parking and traffic improvements, but he expects it will trigger more downtown growth than the hotel alone.

“We’re capitalizing on the private investment by making those (infrastructure) improvements, but it’s not just going to help the Amerock, it’s going to help the entire downtown,” Ryan said.

The development agreement also requires the city to reimburse 100 percent of annual property taxes generated by the improvements made to the property and refund 5 percent of its hotel taxes. It would still collect the 2 percent hotel tax dedicated to paying for the Reclaiming First sports complexes.